STOCKS TO WATCH: Cisco, Etec Systems, Fatbrain.com, Intuit, J.D. Edwards and Komag

The maker of Internet equipment is buying two closely held companies for $7.4 billion in stock. It will buy Cerent Corp., which makes equipment for routing phone calls and Internet traffic through fiber-optic lines, for $6.9 billion - the highest price ever paid for a private tech firm according to Thursday's Wall Street Journal. Cisco is also buying Monterey Networks for $450 million. Cisco rose 2 1/4 to close at 68 5/8 Wednesday.

Etec posted a smaller-than-expected loss in its fourth quarter Wednesday, but it still saw a dramatic decline in total sales compared to the year-ago period.

In the quarter, Etec lost $3.9 million, or 18 cents a share, on sales of $48 million, a 45 percent drop from the year-ago quarter when it earned $18.2 million, or 80 cents a share, on sales of $87.8 million.

First Call consensus expected Etec to lose 21 cents a share in the quarter.

Its shares closed up 31/32 to 38 31/32 ahead of the earnings report.

Gross profit margins slipped from 57 percent to 32 percent, due to lower unit volume, increased manufacturing costs and a higher percentage of service sales which carry a lower profit margin.

For the year, Etec earned $1 million, or 5 cents a share, on sales of $237.2 million compared to a profit of $46.8 million, or $2.05 a share, on sales of $288.3 million in fiscal 1998.

Last quarter, Etec pocketed $1.9 million, or 9 cents a share, on sales of $57 million.

The stock surged to a 52-week high of 55 in February after bottoming out at 14 7/8 in October.

Eleven of the 14 analysts following the stock maintain either a "buy" or "strong buy" recommendation.

Fatbrain.com posted a smaller-than-expected loss in its second quarter Wednesday, losing $5.9 million, or 52 cents a share, on sales of $7.4 million.

First Call consensus expected it to lose 53 cents a share in the quarter.

Second quarter sales from the company's online business totaled $5.8 million, more than double the $2.5 million generated from Internet sales a year ago.

Fatbrain.com added 35,000 names to its customer list in the second quarter. The company now has more than 138,000 customers, including more than 800 new corporate accounts. Online accounts rose 34.6 percent during the quarter. Repeat orders generated more than half of all orders placed.

Shares of Fatbrain.com gained 3/4 to 14 13/16 in regular trading prior to the quarterly report.

The company, one of the fastest- growing enterprise-software makers until this year, reported fiscal third-quarter loss of 7 cents a share before acquisition- related charges, beating a 10-cent average loss anticipated by analysts surveyed by First Call.

Revenue for the quarter ended July 31 fell to $239.6 million. After the charges, the company lost 31 cents a share. J.D. Edwards rose 1 5/16 to 18.

Mired in red ink and unable to create any momentum whatsoever, disk-drive manufacturer Komag said Wednesday it will layoff 480 more employees and shut down two manufacturing plants.

Company officials said it will shutter its two manufacturing sites in San Jose, Calif., leaving 480 of its 1,050 U.S. workers out of a job.

It's going to take a huge charge in its third quarter, but it's still unclear just how much these layoffs and plant closures will cost.

Its Malaysian facility will now manufacture all of its drives.

"Under the accelerated phase down plan we will quickly transfer production activities from San Jose to our low-cost manufacturing facilities in Malaysia," said CEO T.H. Tan in a prepared release. "This accelerated shift of production volume into our cost-advantaged Malaysian plants will improve the company's overall cost structure, result in lower unit production costs, and generate substantial cash savings in future periods."

After starting the year with close to 2,000 U.S.-based workers, Komag will close the quarter with a scant 570 American employees.

Last quarter, Komag lost $49 million, or $1.83 a share after announcing it would layoff 400 employees.

Komag's stock, which closed off 1/16 to 3 9/16 Wednesday, has almost reached the point of irrelevance.

The financial software developer will report its fourth-quarter results Thursday after the bell.

First Call consensus expects it to lose 33 cents a share.

Last quarter, Intuit topped Street estimates when it earned $47.2 million, or 73 cents a share, on sales of $239.7 million.

Its shares closed up 4 1/4 to 84 5/8 Wednesday.

The stock peaked at 110 3/4 in April after falling to a low of 34 3/16 in August.

New Era Networks announced Wednesday that it will buyback 3.2 million shares of its common stock.

The Englewood, Colo.-based maker of software that links corporate computer systems said Wednesday its board authorized a stock buyback of up to 10 percent of its shares during the next 12 months. As of June 30, New Era had about 32.7 million shares outstanding.

The company said it plans to purchase shares from time to time on the open market, depending on market conditions. The company will fund the buyback plan from cash and its marketable securities, totaling about $130 million as of June 30.

New Era's stock price remains far below the 52-week closing high of 75 3/8 reached in early April. The stock plunged in July after the company warned of disappointing second quarter results.

Shares of New Era closed up 1 7/16 Wednesday at 17 1/2.